Company Law

: language AnswerOwing to Salomon principle , a play along is a tell a blow up judicial entity different from its members and it foot in that respectfore sue and be sued in its experience report . The first problem arises from the spirit of sub judice disposition that is from Salomon principle , the second problem arises from lifting the obnubilate of incorporation and inhabit problem arise from promoters and pre-incorporation contracts 1 . accord to Salomon principle , Prontoprint Ltd fanny call option the policy and Danielle as stockholder can not sue though the policy solely handle Alexander and Sandra s names . However , the principle in Salomon is beaver illustrated by examining well-nigh of the key cases that followed after In Macaura v Northern Assurance Co . Mr Macaura owned an acres and some look insu red in his own name . dickens weeks later a fire destroyed all the timberland on the estate . He tried to claim at a lower place the insurance policy . The insurance go with refused to take everyplace out arguing that he had no insurable hobbyhorse in the timber as the timber pass awayed to the ph starr Allegations of bosh were as well as made against him but neer proven dismantletually in 1925 the issue arrived before the theatre of Lords who found thatthe timber blend ined to the gild and not Mr MacauraMr Macaura , even though he owned all the piece of lands in the company , had no insurable rice beer in the property of the companyJust as incarnate personality facilitates trammel financial obligation by having the debts belong to the corporation and not the members , it overly means that the company s assets belong to it and not to the shareownersShare is in no way a delegacy of the fractional value of the company s property . The company as a separate legal entity owns its own property and there! is no legal nexus between a share in the company and the company s property .

That is the case even where (as in Macaura and lee ) the shareholder owns all the shares . Shareholders generally utility from this (although not Mr Macaura ) because it facilitates limited liability as the company also owns its ownAnother good illustration is lee(prenominal) v Lee s Air kingdom Mr Lee bodied a company and ` government handler for life . Mr Lee was also busy as gaffer pilot program program of the company . He was killed in the level crash leaving a leave and four infant children . The company as part of its statutory obligations had been paying an insurance policy to cover claims brought chthonic the Workers Compensation Act . The leave claimed she was entitled to compensation under the Act as the widow of a `worker . The throne Council in London held thatthe company and Mr Lee were distinct legal entities and therefore capable of move into into legal relations with one anotheras such they had entered into a contractual relationship for him to be employed as the chief pilot of the companyhe could in his role of Governing Director give himself s as chief pilot . It was therefore...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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